Patients with histologically confirmed chronic HBsAg positive hepatitis are being studied. A total of 78 patients have been evaluated and 37 followed for at least one year. Twenty to thirty percent of patients undergo spontaneous resolution of their chronic hepatitis disease activity each year. This resolution is associated with seroconversion from HBeAg to anti-HBe. Therapeutic trials of the antiviral drug, adenine arabinoside monophosphate (Ara-AMP) are being undertaken. In an initial study in which a ten-day course of the drug was given there was a uniform and prompt decrease in the levels of criculating hepatitis B virus DNA-polymerase and DNA. However, in only 17% of patients was the response long lasting. As the amount of Ara-AMP given in this first trial may have been insufficient for an optimum response to have occurred, a second randomized controlled study is being undertaken to evaluate a 28-day course of therapy. The role of immunologic mechanisms in the development of the chronic HBsAg carrier state is being investigated.